U.S. v. Stull

• Decision Date: 17 September 1984
• Docket Number: 82-3823,Nos. 82-3478,82-3481,82-3824,82-3825,s. 82-3478
• Citation: 743 F.2d 439
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Henry Daniel STULL, Sr., Henry Daniel Stull, Jr., and Patricia Mooradian, Defendants-Appellants.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 439

743 F.2d 439

UNITED STATES of America, Plaintiff-Appellee, v. Henry Daniel STULL, Sr., Henry Daniel Stull, Jr., and Patricia Mooradian, Defendants-Appellants.

Nos. 82-3478, 82-3481, 82-3823, 82-3824, 82-3825.

United States Court of Appeals Sixth Circuit.

Decided Sept. 17, 1984.

Argued June 12, 1984.

Henry Daniel Stull, Jr., pro se.

Dan Polster (argued), Kenneth S. McHargh, Asst. U.S. Attys., Cleveland, Ohio, for plaintiff-appellee.

Jay B. White (argued), White, Milano & Miller, Cleveland, Ohio, for defendants-appellants in Nos. 82-3481 and 82-3823.

Donald N. Krosin (argued), Public Defender, Cleveland, Ohio, for defendants-appellants in No. 82-3824.

Terry Gilbert (argued), Friedman, Gilbert & Berezin, Cleveland, Ohio, for defendants-appellants in No. 82-3825.

Before KEITH and MARTIN, Circuit Judges, and SWYGERT, Senior Circuit Judge. ^*

SWYGERT, Senior Circuit Judge.

Defendant-appellants, Henry Daniel Stull, Sr. (Stull Sr. or Henry Stull), Henry Daniel Stull, Jr. (Stull Jr. or Daniel Stull), and Patricia Mooradian (Mooradian) were jointly indicted for mail fraud in violation of 18 U.S.C. Sec. 1341. The twenty-count indictment charged the defendants with devising and executing a scheme to defraud through two interrelated vehicles--Mortgage or Financial Brokers Course and Skipper's Discount Company. The first nine counts referred to specific mailings in connection with the mortgage brokers program. The defendants were charged with inducing individuals to become mortgage brokers through false or fraudulent representations and with further causing the new brokers and their clients to submit advance fees to the Stull companies in reliance upon fraudulent representations. The remaining eleven counts referred to specific mailings in connection with Skipper's Discount Company. The defendants were charged with making false representations in order to obtain office equipment, office supplies, and other merchandise which enabled the defendants to carry out the mortgage brokers scheme. The indictment also alleged that Skipper's Discount Company had not paid for the merchandise, and had sent printed materials containing fraudulent statements to creditors in order to frustrate collection efforts.

The jury found each of the defendants guilty on all twenty counts. The district court originally sentenced Stull Sr. to one-hundred years imprisonment and imposed a fine of $20,000. Stull Jr. was sentenced to a fifty-year prison term and fined $20,000. Mooradian was originally sentenced to twenty-years imprisonment. The district court subsequently reduced Stull Sr.'s prison term to fifty years and Mooradian's prison term to ten years.

The defendants and their attorneys have raised a number of issues in appealing their convictions. ¹ We have considered all the materials submitted to us and find their contentions to be without merit.

I. Sufficiency of the Evidence

The essential elements of mail fraud under 18 U.S.C. Sec. 1341 are (1) a scheme to defraud and (2) the mailing of material for the purpose of executing the scheme. Pereira v. United States, 347 U.S. 1, 8, 74 S.Ct. 358, 362, 98 L.Ed. 435 (1954). In order to sustain a conviction, the government must also prove a defendant's intent to defraud. United States v. Sedovic, 679 F.2d 1233, 1238-39 (8th Cir.1982); United States v. Pearlstein, 576 F.2d 531, 537 (3d Cir.1978); United States v. Payne, 474 F.2d 603, 604 (9th Cir.1973). Direct evidence of fraudulent intent is not necessary; where sufficient circumstantial evidence is presented, the jury may properly infer that the defendant was culpably involved from his conduct, statements, and role in the overall operation. United States v. Themy, 624 F.2d 963, 965 (10th Cir.1980); United States v. Beecroft, 608 F.2d 753, 757 (9th Cir.1979); Pearlstein, supra, 576 F.2d at 541-46.

The defendants principally claim that the government failed to prove a scheme to defraud. ² Mooradian also contends that there was insufficient evidence of her intent to defraud. Stull Jr. contends that there was insufficient evidence of his involvement in the mortgage brokers program.

When reviewing the sufficiency of the evidence, we must reverse only if the evidence is such that a reasonable mind could not find guilt beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 318-19, 99 S.Ct. 2781, 2788-2789, 61 L.Ed.2d 560 (1979). In applying this standard, we must view the evidence in the light most favorable to the government giving full play to the jury's right to determine credibility, weigh the evidence, and draw reasonable inferences from basic facts to ultimate facts. Jackson, supra, 443 U.S. at 319, 99 S.Ct. at 2789; United States v. Stull, 521 F.2d 687, 689 (6th Cir.1975), cert. denied, 423 U.S. 1059, 96 S.Ct. 794, 46 L.Ed.2d 649 (1976).

Having reviewed the record in this case, we conclude that the evidence was sufficient to support the defendants' convictions on each count. The pattern of fraudulent statements and misrepresentations, and the close ties between the mortgage brokers program and Skipper's Discount Company warranted a finding of a general scheme to defraud. From the evidence the jury could also reasonably infer that each defendant intentionally participated in both aspects of the scheme. The government is not required to prove that each defendant was a mastermind of the scheme to defraud; proof of a defendant's willful participation in a scheme with knowledge of its fraudulent elements is sufficient. Sedovic, supra, 679 F.2d at 1238; United States v. Price, 623 F.2d 587, 591 (9th Cir.), cert. denied, 449 U.S. 1016, 101 S.Ct. 577, 66 L.Ed.2d 475 (1980); Pearlstein, supra, 576 F.2d at 537. Nor is a defendant exonerated by the fact that he may have participated in the scheme to a lesser extent than others. Stull, supra, 521 F.2d at 689; Blue v. United States, 138 F.2d 351, 358 (6th Cir.1943), cert. denied, 322 U.S. 736, 64 S.Ct. 1046, 88 L.Ed. 1570 (1944). In this case the direct and circumstantial evidence relative to each defendant's statements and activities warranted the conclusion that a scheme to defraud existed and that each defendant joined in both facets of the scheme with the requisite intent.

What follows is not an exhaustive treatment of the evidence against each defendant but rather is a summary of their most significant statements and activities. The evidence showed that the defendants directed their business from their residence-offices in the Carlyle Towers, Lakewood, Ohio. Stull Sr. began the mortgage brokers program in 1976. Stull Jr. ordered cassettes and advertising for the program as early as 1978 and later worked full-time for the Stull enterprises. In testifying before the grand jury, he stated that he controlled Skipper's Discount Company. ³ Mooradian, who testified that her relationship with Stull Sr. was a marriage "without the piece of paper," was first employed by Stull Sr. in 1978. She was rapidly promoted to manager of the Fairview Park office and later to vice-president of several Stull entities. At trial she testified as to her supervisory role over the mortgage brokers program and the defendant's employees.

Through the mortgage brokers program, the defendants sold a mortgage broker course for a fee of $95.00 to approximately two thousand people. The course materials instructed the recipient how to set up business as a financial broker and solicit clients who needed funding for various projects. The materials further represented that brokers would earn sizeable commissions upon fundings of loan packages.

The course literature included photographs of Stull Sr. and Stull Jr., with a masthead listing Daniel Stull as president of Stull, Inc. and Henry Stull as vice-president. The materials represented that the defendants would use their personal expertise, world-wide financial network, and connections with financial institutions to help secure funding for loan packages. A brochure described the New York and Switzerland offices of Stull and Company, and stated that Stull Bank & Trust Co., "an offshore international bank being formed," could help "fill in the gap" in funding loans. The evidence at trial indicated that these "offices" were mail forwarding telephone answering services and that the "international bank" had no assets or deposits, nor was it licensed or chartered as a bank in the United States. In many documents the defendants also represented themselves as doctors, lawyers, brokers, and foreign diplomats. Each of the defendants admitted, however, that he or she was not licensed by any state to practice law or medicine and that their titles were conferred by "King Leonard" of the "Hutt River Province." ⁴

The mortgage broker materials also advised new brokers to obtain advance fees from clients and forward either seventy percent of the fees to the Stull companies, or to forward the entire fee, in which case the defendants were to return thirty percent to the broker. The defendants' records showed that more than $140,000 in advance fees were obtained from various clients, and that most of that money was forwarded to the defendants. The evidence also indicated that the defendants often kept the entire advance fee.

Brokers and clients testified at trial about deceptive letters from and telephone conversations with the defendants. One loan applicant stated that Stull Sr. told him his loan would be funded in thirty days at an interest rate of twelve percent; a broker testified that Stull Sr. told him that Stull & Co. would fund his clients' loans in thirty to forty-five days. In a lengthy letter to another broker, Stull Jr. described the defendants' supposed efforts to fund his clients' loans; the letterhead was captioned "Stull & Stull Attorneys." Another broker testified that Mooradian told him ninety-six percent of the loans sent to Stull & Co. were funded. When testifying before the grand jury, Stull Sr. was unable to identify a single loan that Stull & Co. had...